2018 (6) TMI 627

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....ared them paying excise duty. The appellant had purchased consumables like dunnage foam, thermo cole, BOPP tape etc. which are used by crate manufacturers for the manufacture of crates. The appellant had taken CENVAT credit on the raw materials and also on the consumables. Based on intelligence, the officers visited the factory on 6.2.2009 and found that the appellant had sent the CENVAT credit availed inputs like dunnage foam, BOPP tape etc. under returnable gate passes to independent crate manufacturers and had not reversed the credit taken. A show cause notice was issued proposing to demand alleging violation  of Rule 3(5) of CENVAT Credit Rules, 2004 and also proposing to demand duty along with interest and also imposed penalties. ....

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....er and returned to the appellants. The job worker has supplied the goods by payment of duty. Even if appellant complied with Rule 3(5) and reversed the credit, the finished crates are cleared on payment of duty and appellant would be eligible for credit. The entire situation is thus revenue neutral one and therefore only because there was no proper challans when the goods were removed to the job worker, duty cannot be demanded. 2.2  The Id. Counsel also argued on the ground of limitation. He submitted that the goods were removed under returnable gate passes and the credit availed was reflected in the returns. There is no evidence to establish suppression of facts on the appellant. The entire exercise being revenue neutral one, the inv....

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....sp; (i)      International Auto Ltd. v. Commissioner - 2005 (183) E.L.T. 239 (S.C.)           (ii)     Venlon Polyester Film Ltd. v. Commissioner - 2010 (249) E.L.T. 495 (Kar.) 3. The learned counsel has, on this basis, contended that the appellant was not only entitled to CENVAT credit on the tubes but also to similar credit of the duty paid on the job-worked goods by the job worker. Even otherwise, according to the learned counsel, a revenue-neutral situation would have emerged if the appellant had reversed CENVAT credit on the tubes at the time of clearance of the goods to the job worker and if the latter had taken credit thereof. It is argue....